Peter Lisoskie (@chatbotnation ) is helping companies integrate AI chatbots into their marketing, branding and customer service strategies. Peter thinks there’s a shift happening and much of the current digital economy has transformed from a blessing to a curse. Email, websites, social media, and webinars are becoming the new NOISE of the marketplace.

It’s time to think different.

Early adopters are building ai chatbots. In this episode, Peter, explains to how chatbots will be the next form of owned media especially now that Facebook is reprioritizing its news feed. Peter talks to me about the different types of bots, how to build them and how to increase conversion rates using AI bots. Enjoy!

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Full Podcast Transcription

Peter: Thank you, Scott. It’s going to be a lot of fun. We’re going to have a great time talking about all the stuff that you probably want to know the role of Chatbots.

Scott: Yeah, today with me on the show is Peter Lisoskie. He’s on Twitter @chatbotnation, and we’re going talk about Chatbots. Peter is going to tell us a whole lot about what we need to know to run these things on our websites, in our messaging services and for customer service and sales perspectives. Peter, starting off, can you kind of level set us what the difference is between a chatbot that runs on my website and maybe one that runs in a messenger service or wherever it runs. Because I understand the website one because I like to interact with those, I can circumvent a lot of marketing automation by just going straight to the source and talking to the bot or maybe a person that’s monitoring one of those.

What is the difference between the website bot and the messenger bot?

Peter: Well, there’s a really kind distinct differences and use the backup just a second, Scott, everybody is on the same page with us. Chatbots really you probably heard the term there automated software service programs that aid in conversation. They can help you do a lot of things we’ll get into that here with Scott in the show. But as far as a website chatbot, if you guys go to website and you look down at the bottom and you click on chat typically in the past one of two things happened, either somebody popped up and you started talking to them and I was live chat or the other problem happened which is you clicked it and no was there and they said, please leave us an email and will get back to you in 24 hours. That’s become a real problem because everybody wants instant these days.

The website Chatbot can handle a lot of customer service. Nowadays, Scott, too we have what’s called Artificial Intelligence and machine learning where we build these engines that it starts out with like a FAQ, its Frequently Asked Questions but then it can learn based on people’s questions and answer back from the questions that was given that weren’t part of the original frequently asked questions, okay. That’s kind of a role of website Chatbot they set in your website, the other part that Scott was mentioning is the Messenger app and there’s different ones we build they could be for slack kick, but the biggest and most popular is Facebook, as you guys know, because Facebook as a couple billion people and they’re pushing, Scott, about 1.6 billion messages a month through a Facebook Messenger right now. Now, what I love about the Messenger app is the fact that they’re instant. So in other words, when one of somebody clicks on a link or scans a messenger code which we can talk about or types a keyword into a social comment the messenger window pops up and the chatbot immediately and instantly starts interacting with that person. A website Chatbot can’t do that yet. So that was nice and they can start engaging them right away and that instant is really, really powerful. It’s like think of the instant news feed notifications you get on Facebook, the other thing that chatbot can do in a Messenger feed is they can do auto responders like an email system.

So you can do a whole nurture sequences inside the chatbot based on what is important and relevant to the user. It can also do segmentation, Scott, where as a user’s conversing or clicking on buttons or typing in questions the chatbot is segmenting and putting that person in a particular interest area or bucket so it is giving them content that’s relevant to them or that is interesting to them.

Scott: And then with the Facebook bot does that fit on my website? Forgive me, because I actually don’t know. Do I have to be logged in to everything for it to work? So say for instance, I’m not logged in to Facebook Messenger on my laptop because I’m primarily a desktop user and I go to a website but they have a messenger bot.

Will it work or do I have to be logged in to everything all at the same time for it work?

Peter: That’s a really good question, Scott, the answer is no. For example, you could even have a messenger button so you had it on the side bot. Let say, Scott, you wanted to give them a — we have like a marketing strategy playbook for chatbots for companies. So I would say I have that on my right sidebar they can click on that and basically the Facebook Messenger window pops up automatically you do not have to be logged in to Facebook for the Messenger window to pop up and for them to start interacting with the chatbot.

When do people realize they need a chatbot? When do you do this? Or do you do it now because it’s hot?

Peter: The way I look at it, Scott, we have moved over the course of history. It’s been kind out a decade at a time. We went from PCs then we went to the internet, then we went to smart phones and now we’re moving to messaging not Messenger but messaging as the new platform. Conversation is the new economy. So this is not a fad, it is new and it is going to be look at very carefully in 2018 by a lot of companies and it’s something you should if you’re listening to the show, you should look at very carefully as well. The chatbots can be used, let’s say, you’re doing you could do a Facebook Ad, Google Ad, you could do a podcast show like yours, Scott, you can do blogging, you could do social media comments, whatever you’re doing out there in the digital space you can bring all of that into the chatbot and then the chatbot can do leave qualification. The chatbot can do customer service, the chatbot can collapse your sales models to get to a point where there interested and they want to contact your dealer or they want to buy something online from you.

But think about it this way, Scott, the biggest and most powerful way to look at it is every company has a customer journey and the chatbot creates this conversational journey that parallels the customer journey. Sometimes a user needs to have live interaction with the human being and sometimes it’s very appropriate for the chatbot to carry the load in many of those situations in the conversation. So that’s how we work with different clients as we’re mapping out their customer journey and then were overlaying the conversational journey that supports that customer journey.

How do I build a chatbot?

Peter: If you want to do it yourself there’s about 300 and counting now different chatbot platforms out there at the very low end the very basic one is ManyChat but there’s other ones. There’s Motion.ai from HubSpot, there’s Conversica, there’s Engati and there is Chatfuel there. And they all serve different purposes. They have different focuses and different specialties. Again, what you need to know is like what kind of bottom I’m trying to develop and then how techie are you? If you’re not very techy my recommendation is use ManyChat because it’s really built for very low end what we called done bots where they’re just kind of guided conversations. ManyChat has some functionality but not a lot compared to the others but you can still develop a bot a few days and have it out there. If you want to just have something as simple as I want to bring people into the bot and I want to give my lead magnet and build the least. ManyChat can do that just fine. But if you want to do something a little bit more interactive like what we do it Active Attention Design was talking animated characters and some intelligence with AI and functionality, you need to be more technical and there are different bot platforms to do that.

You mentioned AI a couple times, is this some type of algorithm that you wrote or you subscribe to? How does that work?

Peter: There’s different levels of Artificial Intelligence. One them is they can be built into the platforms where it is called a natural language understanding engine, Scott, and it has machine learning. In the customer service world, for example, what we would do is we put in we build the engine out with the number of questions that we would anticipate the customer might ask and then we would provide the appropriate response, okay? That’s a baseline and then from there the bot through machine learning and through all of the user sitter coming in and the questions that are being asked you can start learning what kinds of phrases and things that are being picked up and it can provide answers back based on its algorithms, okay, that’s one way. The other way is the ability to set up Artificial Intelligence through a more technical fashion like what use to be call API.ai which is now call Dialogflow it’s a tool by Google where you can actually create what they call intense and advance and it can trigger certain responses or functionality based on responses or inputs given by the user. And then there’s a third form AI which is called Deep Learning AI which is done with the tool like a TensorFlow where you actually your training the bot but it is getting the intelligence factor is much higher after you train it. It can handle even contextual things in language, phrases, you know, certain types of words like to, too, and two, right, where we have to the box, the number two or I want to go as well too, right. The TensorFlow can handle those kinds of things but you do have to train it and it has to have some deep learning.

Do you have any data on some of the retention rates or open rates or engagement rates that these things help drive for your customers?

Peter: It’s quite a bit better. We have what we created as called Active Attention Design and that only means that they open in click-through rates. I noticed a long time ago, Scott, my background is in tech and everything I try to do is I want to create this human connectedness, right. One of the first things in my work life, Scott, was when I started it was we have VT100 terminal we didn’t even have PCs, and when we first got our first Mac classes and I pull out of the box and the screen lit up and there was like files and folders. I mean was this almost this emotional interactions like, wow! This is like really cool.

When we created Active Attention Design, it was born out of the fact that the world right now we have a real problem and that is everybody’s in the sandbox of websites, email marketing, social media, things like that. Well, you know what, the problem we have is like HubSpot just reported a couple months ago over 55% of people spend less than 15 seconds on website now. Email marketing industry averages about 20% open rate, 1% to 2% click-through rate, social media it just adding more and more to the noise.

From customer standpoint, what used to be a blessing is now a curse and we are creating more and more of this noise and not only that, Scott, but its passive. I mean, if you think about the email marketing situation you could be using a very powerful tool that is doing segmentation, but the problem is is that that person that customer still has to go to their inbox. They have to open the email — open their inbox, they still have to find the email, read it and clicked though it. And the average American these days is up getting about a 121 emails a day, that’s average.

Hence, how do you get in hold a customer’s attention, right? That’s the problem, so we moved a different sandbox with chatbots and what we call Active Attention Design. We’re using talking animated characters, we’re using neuroscience and cognitive biases, we’re creating a conversational user interface standard, Scott, that don’t exist. And we’re doing this by looking with our clients, looking at the analytics and seeing what’s working and what it’s not working because if you think about it somebody way back when a graphical user interface standards had do the same thing, they didn’t exist, right?

What this is all lead to is typically we’re getting north of 80% open rates typically around 90% and we’re getting north of 35% click-through rates. So if you compare that to email marketing and say like you’re getting 2% and I’m getting 35% I’m getting over 16 times a click-through rate for the same cells back.
Then it begs a question, well, why would I go hang out an email on an own standpoint when I can do that and get a much better response in a chatbot, because I can build a bot list on the chatbot.

Scott: Yeah, and until it getting more and more difficult. Like what you said about email as passive because yeah you go and you fill out a form and it takes you forever to actually talk to somebody and get like a real answer but a chatbot you can either qualify in or out that person almost immediately and then advertising is getting more and more difficult especially when what was it? Was it last Friday when Facebook announced that they’re going to reallocate the feed to be in a more of the people that you want to hear from unless for advertiser.

Could you use Chatbots in that instance where our Facebook cost-per-click is going to go up so maybe we shift up those funds to maybe a Chatbot strategy and our engagement rates go up.

Can we save money by doing the Chatbot or they just as expensive as advertising? What’s the cost benefit here? Am I on the right track? Is that makes sense?

Peter: Yeah. No, that’s a really good scenario you bring up and it’s very important. I don’t know if you guys have heard but Zuckerberg last Friday this was reported, I saw it in Bloomberg News their market cap would down about 3.3 billion dollars. With his statement which is I’m planning to shift users news feed towards content from family and friends at the expense of material and media outlets business, right? I already know, Scott, because I own a Health and Wellness Center it’s a Brick & Mortar and I’ve been doing Facebook Ads for the last three years and my cost per lead is gone from about two bucks to ten bucks and that’s just in that period of time.

Now, if you start taking away the news feed for businesses in media’s they’re forced to go do pay. Facebook is already come out for the last year-and-a-half. In fact, they even said that by the end of 2017 they’re going run out ads based on their news feed. So if you look at a basic Economics 101: Supply-Demand, what do think is going to happen to that advertising cost? It’s going go way up, right? That’s a paid, right.

If you look at companies, they’re probably listening, if you’re a CMO, you think of things in terms of pay and turned it on, right. So, you’re paid strategy on Facebook anyway is going go up. We already know where Google PPC is that’s gone up depending on what your keywords are and things like that. In the earn space, you know, Scott, you’re doing a podcast so you’re getting sharing of your show but there’s also social media, there’s blogging and things like that. You can still do and that’s a good strategy and earned it harder to scale and it takes time, right.

If you want more of a scale of a list of response you got to go over to the pay. But either way at the end of the day the owned is where this is going and where I think it’s going for 2018 in a huge way and that is if I am spending money and the cost of advertising is going up and I’m spending time and which time is money in the earn space too as well, I better have a good own strategy and in my mind really there’s only two good ways to do own, one, is email marketing and other is chatbots.

If you look at — let’s just do the math really simply for all your listeners. If I’m bringing in a thousand leads to an email marketing campaign and I’m only getting a 20% open rate I only have 200 people that opened an email. If I do the same time thousand leads in the chatbot and I have an 80% open rate I have 800 people that saw that message and open it.

Now, if I go the click-through and I say, out of those 200 I’m only getting a 2% response that’s only four people that click-through an email marketing. If I get a 35% or 40% response on the chatbot that had 800 people have opened it I’m looking at about what is that 300-350 people that click through versus four people. So you just do the math, I mean just the math tells you along which one would you pick. And by the way, Chatbots are interactive, they’re conversational. We do animated characters and make them entertaining and fun and engaging. They have artificial intelligence.

They do segmentation relevance like email but they have so much more capability and so much more richness while you’re developing a list and having this interactive conversation that you can’t have with email.

Yes, that’s really really tough. I mean it sounds like a great deal if the metrics are what you say, do you have anything that we can read, point as to or are we just supposed to take your word for it?

Peter: We have different — so if you go over to our website botnation.tech, it’s botnation.tech. We have different Play books and case studies and white papers that you guys you can look at it and see for yourself on these are basic — because we have clients across manufacturing space, craft breweries, coaches, authors and speakers, software. And it’s very similar across the board.

Obviously, each of them have their different conversations but at the end of the day if a customer has the ability to talk to someone instantly to be able to get content and information that’s interesting and relevant to them. We’re not shoving something down their throat in a marketing message to be able to choose their own journey and get the results they want when they wanted it 24 hours a day, 7 days a week you’re going to get a better response and we’re seeing that in our numbers.

I am going to try this and I’m going put it on my own site somehow. What should I do?

Peter: Yeah, it depends on kind of which approach like in the conversational journey what bot strategy, if your focus more on, hey, I want to just see what happens if I put on my website for customer service then I would do a website bot. If you’re more focused on I want to try this out for lead qualification, marketing, branding then a Facebook Messenger bot is more appropriate for you, Scott.

Well, I am going to try it out and hopefully I don’t stay up too late doing it.

Peter: I know you have some technical background you can figure it out. The thing is this market as with any technical market and I’ve been in technology for my whole career, a lot of pride in element is moving pretty fast, there’s always new things that are coming up that you can add to functionality. So the best it’s either do it yourself or come to us in a company if you wanted to have it done for you and then we keep up on all the technology and add either version 2.0, 3.0. And were having talk about voice that’s coming in a big way not just in home voice like in smart speakers like Amazon Echo, Google Home Products but also voice out there on the internet as well that you’ll see some of that happening later in 2018.

What do people ask you for advice or opinion on outside of chatbots and health?

Peter: I talk to people quite a bit about just business in general as far as how do you strategically — I love the innovation of business and where things are going but there’s also some basics in business as far as marketing strategy, financial strategy and analysis and things like that. I have people that asked me about that I’m going to be jumping on a couple boards here for high-tech companies to help out and do those kinds of things. It’s just general, I’ve grown different businesses, I run the visions for corporations and so there’s a little bit of experience that I have that feel like I could help and pass on to people.

What do you listen to or read to get inspiration? Do you follow anyone, anything regularly?

Peter: I guess as far as reading, couple of books I’m reading or have read or reading right now, one of them is Play Bigger by Christopher Lochhead and gain in fact, we talk — he’s working with us on the Active Attention Design. He, by the way, has a really cool podcast it’s called Legends and Losers and it’s been named by Forbes Magazine podcast for Silicon Valley. He has some very interesting guess to come on.
The other book that I am reading now which is been around for the while but it’s a really good book, The 12 Week Year, which I find very fascinating to see, how do get that clarity and focus to make sure you’re moving through and making things happen 90 days at a time.

If you didn’t have any responsibilities at work or work next week what would you do with your time?

Peter: Probably go travel back to Europe. I travel all over the world and there’s been some cool places that I’ve to and then there’s some places that I was like, because it was always business, Scott, so there’s places like, “Wow, this is really cool place,” but I never had time to explore because all those working. So I’d like to go back to different countries in Europe and just travel around and have some take some time.

Scott: Business travel you always get to see the hotel, the conference room in the airport.

Peter: Yeah, that’s about it. And occasionally on the weekend you get a little bit of time over but not earlier though.

Scott: If you stay an extra day or two and then you got the family call in your like, “Hey, aren’t you done? Can’t you come back?” Well, thanks Peter. Any closing thoughts on chatbots or anything else?

Peter: If you want we have — if you guys want to see what this is all about we do — if you go to botnation.tech there were some demos down at the bottom of the homepage. If you want talk to us there, you can, if you want to hang out with us I have group called Chatbot Nation, it’s a closed group but you can certainly join it, free of charge. I do live streaming in there and talk about what’s going on in conversational experiences and things like that and chatbots and that’s freeway for you to learn about this whole world that were moving into.

What is your preferred method to people contact you with a question based on what they heard today or you know anything else?

Peter: Just go to botnation.tech and go to contacts in the contact menu and you can ask a question there. Typically, where we’re going is everything is getting importance to the chatbot. So then the chatbot can help you out with a lot of things but if you want to talk to me directly then just put in that request and we’ll switch it over and we’ll have a chat.

Peter, well thanks so much for your time. I really enjoyed the education and hopefully we taught everybody a little bit about chatbots.